After more than a year of weak oil prices, the fallout of roomnight demand in oil-producing areas has waned as supply growth continues its strong upward momentum, which means more trouble ahead for hoteliers. According to Hotel News Now, the decline in demand can easily be traced back to the price of oil. As oil prices hovered around $100 per barrel, new oil and gas wells needed additional workers and offered employment for many. But the lack of accommodations in the rather undeveloped areas of the U.S. forced workers to, in the beginning, sleep in their cars and then in “man camps” until finally hotel development caught up with the rapid demand. But as much as room demand increased when oil prices were high, it waned quickly when oil prices, and thus production and employment, decreased rapidly in 2015. Room demand changes in the submarkets* that are primarily driven by the oil and gas industry have been negative since March 2015 and decreased more than 10% successively in the last three months ending January 2016. The negative impact of the last few years is only the latest roller coaster change in revenue per available room as the oil prices and supply additions caused hoteliers euphoria in the mid-2000s and heartburn in the more recent past.
Office vacancy rates in the Albuquerque, New Mexico metro area continued to rise in the second quarter of 2012. According to New Mexico Business Weekly, the office vacancy rate hit 18.8% in the second quarter, up 0.4% from the previous quarter and 0.8% year-over year. The vacancy rate from the second quarter hasn't been seen since the second quarter of 1989, as the market slowly recovered from a spurt of overbuilding in the 1980's.